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The iPhone is 10 years old and it is an inimitable success story…

Every quarter or so, the world’s media and the tech industry question Apple’s innovation. They always ask, when will the company release something new that will revolutionize the world once again? Can it release something better than the iPhone? Can Apple make it big again without Steve Jobs?

It is human nature after all; when someone or a company surprises you, there will always be high expectations.

For Apple, it started as early as 1984 when Steve Jobs introduced the Macintosh, which changed the computer industry. Today, Apple sells around 100 million Mac.

Then, after being ousted from the company he created, Jobs returned to Apple in 1997 and presented the iPod in 2001. Not only did this device change the way that people listen to music, at a time when the industry was in turmoil with the MP3 file format, but it also changed the business music industry itself. As a result, Apple sold more than 400 million iPod and the device is still available.

Finally, exactly 10 years ago, on June 29th 2007, Apple commercially launched the iPhone in the United States of America only. Despite some skepticism from competitors, the device was a huge hit and once again, the whole industry was set for a new era in which touch screens would replace hard keyboards. As of June 2017, Apple has sold 1.2 billion iPhone.

If Apple needed 30 years to sell 100 million Mac, it took only 15 years to sell 400 million iPod and 10 years to produce 1.2 billion iPhone. Even if these numbers are slowing down, the company shipped more than 215 million iPhone in 2016. Given that their average height is 60 mms per box, this would make a pile of iPhone that was 8,015 miles high. Or, from 2007, a staggering 44,740 miles! In other words, you could almost circle the Earth twice. Amazing.

But the most amazing numbers that make the iPhone’s history really unique don’t come from their shipment figures because, at the end of the day, there are a lot of industries that produce more devices or goods. Take the TV industry, which ships about 225 million sets per year. And the computer industry? Well, they shipped 260 million devices last year, and the tire makers produced 2.5 billion tires last year alone.

The big difference comes from sales, as on average every iPhone is sold for USD 620. This means that after 10 years, Apple has made more than USD 700 billion thanks to this electronic device that weight less than 7 ounces. That is a huge amount and in the last fiscal year alone (2016), revenue for the iPhone was USD 156 billion with a >40% gross margin.

Now, that’s where the iPhone saga is unique and it’s very likely these impressive figures will not be reproduced by anyone else soon. To give you some perspective, it’s interesting to know that the famous manufacturer BMW produced 2.5 million vehicles (BMW, Mini, Rolls-Royce and Motorcycles) in 2016 and made around USD 11 billion. Or Johnson & Johnson, the medical devices, pharmaceutical and consumer packaged goods manufacturer? They made just half of the iPhone revenue with USD 72 billion. And what about Boeing, which has almost 930 aircraft (both commercial and military), as well as 7 satellites? USD 95 billion!

There are less than 20 companies around the world who are able to make more revenue than the iPhone and less than 10 that make more revenue than Apple.

You can even compare iPhone revenue to the GDP of some countries, like Algeria (167B) or New Zealand (173B), and these are countries that have 40.5 and 4.8 million habitants respectively. In fact, the iPhone’s revenue alone would be ranked 56th in the world, compared to the GDP of 195 countries around the globe.

As the iPhone celebrates its tenth anniversary, people should stop asking what will be the next revolution, as its success is ongoing. The iPhone or smartphone is, in general, part of an ecosystem that is changing our lives from any perspective you choose to look at and this is only the beginning.

Thanks to smartwatches, captors and IoT, our future will contain either completely active or passive monitoring and this will bring about services that few of us can foresee at the moment.

Is your business or enterprise ready for this change? Are you willing to transform your business model to survive or to become the next market leader?

Apple cares about the Mac, an exclusive interview with Phil Schiller

Following the release of the MacBook Pro 2016 and the “comments” storm that followed its release, I wanted to have a quick review of Apple’s ecosystem, as the Mac is directly linked to the iPhone and iPad.

First of all, I must confess that the Mac has had a terrific run for the last couple of years. Based on the success of the first iMac in 1998 and the iPod in 2001, Mac sales have had a strong performance:

Note that those numbers are based on Apple’s fiscal year (which goes from October 1st to September 30th).

From less than 5 million machines sold per year before 2005, Apple has managed to sell more than 20 million machines in 2015. This massive increase has enabled the company to enter the world’s top 5 or 6 computer manufacturers. From a revenue perspective, Apple made around USD 6 billion in 2005 from its computer division and an outstanding USD 25 billion in 2015, or “only” 11% of Apple’s revenue in 2015! Now, this nice run did have two hiccups: in 2013 and 2016. So, how does it compare to the rest of the industry?

In order to make the graphic easy to read, I divided the worldwide PC sales by 10. Even if the 2016 numbers are not final, there will be no miracle for the PC, and worldwide shipment is roughly down 25% from its high in 2011. On the other hand, Mac shipment is down 10% from its high in 2015, but is it the end?

Last October, Apple invited all of the media to a Mac event with a little card saying, “Hello again”. For those who haven’t followed Apple since the beginning, this ‘Hello’ is very famous as it was used with the first Macintosh in 1984. This short sentence created a lot of expectations because, fundamentally, the Mac portfolio was kind of dead, as some of the 6 models, like the Mac Pro, didn’t receive any kind of update for a thousand days! That’s almost 3 years… an eternity in the IT world.

But the surprise was short-lived, as Apple presented only one new laptop – the MacBook Pro (2016). Worse still, this fell short in terms of connectivity, as previous generations had 6 different connectors, but the new one, only 2:

 MacBook Pro 2015MacBook Pro 2016
USB2 (USB 3.0)4 (USB Type-C)
MagSafe 21
Thunderbolt2
HDMI1
SD card reader1
Audio jack11
(not compatible with iPhone 7)

As a consequence of this radical change, Apple also introduced 200 new adapters or cables (maybe less). For many, this release was seen as too little too late and, more importantly, as a rip-off because all of the accessories came with a high price tag. In order to calm the community down a bit, Apple gave customers a 50% discount on accessories just a few days after the announcement and made this valid until December 31st 2016… then they extended this offer until the end of March 2017.

Will this be enough for Mac sales to climb again in 2017? The first quarter will be probably good because a lot of people are waiting for a renewal, but in the long term, I doubt it if the portfolio will stay as dead as it is. Of course, laptops probably account for more than 60% or 70% of sales and Apple is right to focus on this family of product. However, it looks like the MacBook Air is dead too, and all that is left in this segment is the most basic MacBook, which means the portfolio has gone from 3 models to 2.

And what about the desktop range? It is dead too! The iMac is more than a year old, the Mac mini is more than 2 years old and the Mac Pro is slowly but surely approaching 3 years of life. Who else in this industry can wait that long without an update? Does Apple still care about the Mac?

After an avalanche of critiques that asked if this “Hello again” party was a joke, the company’s top management came to the rescue. It all started less than 5 days after the event when Phil Schiller, Apple VP Worldwide Marketing, declared to The Independent:

“We love the Mac and are as committed to it, in both desktops and notebooks, as we ever have been.”

Good to know, but how can he say that when Apple has not updated one single machine, even with a simple processor upgrade? From a supply chain point of view, one even wonders if such old processors could be found on the market to equip these machines! But then, Tim Cook sent an email to employees in December that said:

“Some folks in the media have raised the question about whether we’re committed to desktops. If there’s any doubt about that with our teams, let me be very clear: we have great desktops in our roadmap. Nobody should worry about that.”

To be honest, a lot of people do worry about that and they are very frustrated by this lack of commitment between what the management says and the products’ lifecycle. Back in 2000, the Mac made up 86% of all sales and the company updated some Mac models up to 2 or 3 times per year.

Today, as the Mac accounts for only 11% of the company’s 2015 revenues, even if sales were multiplied by 4, there are more important priorities. For example, iPad sales peaked in 2013 with 71 million devices and “only” 46 million devices were sold in 2015, that’s a 35% decrease. The same goes for the iPhone. After the record sales of 231 million devices in 2014, the company sold “only” 212 million devices in 2015, an 8% decrease. The iPad and iPhone accounted for 10% and 66% respectively of revenue in 2015. In other words, 76% of the USD 233 billion made in 2015 came from two families of product that are now slowing down.

However, there is great frustration and I was able to get in touch with Phil Shiller to ask him some questions.

Here’s how our conversation went:

Phil, first of all, thanks for your time in this busy season. As you know by now, people were quite upset with your last announcement as they were expecting a refresh across the whole Mac portfolio and not just one model. Can you provide some information about what is coming up next for Mac users?

Sure. We’ll announce some new products early next year and not only some component update. Some products will even come with a new form factor and new ports all around.

But will you kill some products off like the MacBook Air and propose to have even fewer products in future?

First of all, we didn’t kill the MacBook Air, it is still on sale.

Come on Phil, this machine is almost 2 years old and you didn’t update it. Nobody will buy it, but our readers are interested in the desktop offer, which – and you can’t say the opposite – is totally outdated. Right now, 3 machines are available, will you provide less choice?

I can’t go into details, but we will provide the right amount of machines that will fit every user’s needs. May I remind you that in 10 years, we managed to sell 4 times more machines, but with almost the same amount of models? In 2005, we had 5 machines and in 2015, we had 6 models in our portfolio. This simple strategy made Apple the fourth largest computer maker around the world in terms of volume.

It is a great achievement and as you are talking about your competitors, do you know how many models HP or Dell are proposing?

Probably too many. We have no plans to extend our Mac models. Remember: less is more.

I know that slogan, but as the number of users increases around the world, don’t you think you’ll need more models in order to sustain this growth and address specific customers’ needs? Look at the iPhone, you went from one model to at least 3 different models and shapes.

No, our mantra is to keep a very clear strategy and a simple choice for the users. Do you know how many models HP proposes? I did take a look the other day, out of curiosity, when I wanted to buy something for my mother-in-law and guess what, on the desktop side, there are more than 9 models and on the laptop side, more than 10 models, which allow you to configure more than 193 machines! At this stage, I asked Siri where I could get painkillers at 2am!

Did Siri find the answer?

No, you know that at this stage, you can’t rely on this thing. I simply asked my wife Kim what she used last time she heard something from Donald Trump and that was it.

Fine then, but you made some weird changes with the last MacBook Pro. Should desktop users start to be worried?

It was not about weird changes, it was about courage! These new USB ports are the future and not even Einstein’s or Hawking’s theories will change that fact. Now, on the general philosophy of our portfolio, Ive and his team can’t design 10 or 20 new machines per year. Our suppliers already go crazy with the requirements and drawings that are coming out of his lab, so imagine if we multiply that by 10. It’s best to keep things minimalistic even if, from time to time, this is frustrating for our clients.

Yes, but you explained the motivation for these choices by saying that you abandoned some of the ports because of physical constraints, but the MagSafe port and SD card reader were both very thin. Why did you move away from those solutions?

You are right and we could have fitted those ports into the new chassis. However, it was not the solution because our market studies proved that the market no longer needed such features. First, regarding the MagSafe, we introduced it in 2006 when Apple was a small company and our clients around the world were not very smart. In 10 years, we became so great and our clients so smart with our products that we clearly saw a smart power supply connector like the MagSafe 2 was no longer needed, even if MagSafe 5 was ready to go live. Today’s clients are so smart with our products that they don’t come inadvertently across the power supply cable. Instead, they feel it and never pull it out by accident. Secondly, the SD card. That was a joke from day one because there were more than 6 card formats and we sincerely didn’t know which one to take. Then, while I was on vacation, I lost my card reader and I asked our engineering team to provide an MBP with an SD reader integrated and they did just that. Now, as I only use my iPhone to take pictures, I simply asked our engineers to remove it and photographers that are not happy can use WiFi.

But Phil, an integrated SD card reader is much faster than any WiFi connection when a photographer needs to transfer huge amounts of data. For example, the previous MBP can easily achieve a transfer rate of 480 Mbit/s with the SD reader, while a WiFi connection will rarely provide a better speed. So why abandon it when the new MBP had adopted the ultra-fast PCI Express?

That’s a good question but nobody uses it at the management level, so we didn’t really see any need and the future of photography is the iPhone. Ask Canon and Nikon how their sales are going.

I will and I have one final question: historically, Apple didn’t have the classic structure with divisions per product or service. As Apple grows and gets into more sectors, won’t the actual structure of the company become a limitation? Typically, is this lack of attention for Mac products the direct result of this current management, which got caught into a sales slowdown regarding the iPad and more recently, the iPhone?

No, we do such nice products because we all care. If the Mac was run by a different division, they would make stuff that is incompatible with the rest of our products.

But Phil, your last MacBook Pro features an audio jack that is not compatible with the iPhone 7, which was presented just two months earlier! How do you explain that?

Come on, it looks like you don’t like our last product. What’s wrong with you? Would you prefer to spend 5 hours on the HP store and try to select one of the 193 machines available? You better go to pharmacy.com first and order a full truck of painkillers!

Thanks Phil, I’ll wait for your next Mac announcement and analyse if you are really committed to it.

PS: before Apple’s Legal department calls me, this interview was completely fictional…

Apple and the smartphone era

It is official and by now, all the media and social networks have reported that for the first time since the iPhone was launched in 2007, its sales will go down in the next quarter! So is this the beginning of the end for both Apple and the smartphone in general?

Nowadays, everything goes fast, very fast and not only from a technological point of view. A product can be a success one day and then a few years later, a complete flop. Remember the Netbook, the computer that was supposed to change everything in the PC sector?

When Apple presented the iPhone in 2007 everyone, except for its aficionados, was very skeptical about how successful such a device could be. Of course, some big names in the tech sector had very stupid thoughts about it and today some of them have simply disappeared, as well as the companies they were running.

Once their competitors started to copy the iPhone, the smartphone quickly took off and reached amazing sales levels in 2015. According to IDC, more than 1.4 billion smartphones worldwide were sold last year. To put these sales into perspective, only 247 million televisions and 315 million computers were sold in 2014, as both sectors were down for a few years. The smartphone’s success wasn’t just huge, it was simply stratospheric.

smartphones_sales
Smartphone worldwide sales

This is the opposite of what happened when the Macintosh was first introduced in 1984 and then widely copied. Apple couldn’t sustain it and the company almost went bankrupt in 1997, as 90% of its revenues came from the Mac’s sales. The history of the iPod, iPhone and iPad was different and for some time Apple was the market leader, as a result of the amount of smartphones that were sold and the revenue this generated. According to IDC, Apple sold more smartphones in 2011 than any other company, taking over the number 1 position from Nokia. Since then, it has held second position, including in 2015 when it achieved a 16.2% market share (with 231 million devices). Meanwhile, Samsung has taken the lead with 22.7% (325 million devices).

Since 2007, year over year, every quarter has shown better smartphone sales overall and Q1 2015 (October to December 2015) was no different, even if the increase was very limited. However, after 35 quarters, this is coming to an end and the company has warned that for Q2 2015 (January to March 2016), sales should be around 50 to 53 million devices. Those numbers are 13% to 18% lower compared to Q2 2014, when the company shipped 61 million devices.

iphone_sales_36q
For 35 quarters, Apple never disappointed… it probably will for the 36th

I will not go into the financial details, as you’ll find lots of better information elsewhere, but overall this means that billions will be missing at the next financial quarter too, as the iPhone brings in roughly 60% of Apple’s revenue. I’m not even mentioning the currency effect, which shaved 5 billion dollars from the revenue. Exceptionally, Apple even disclosed an additional document called “Supplemental Material” to explain the problem, but the level of disappointment was too high and, as a result, the stock dropped by roughly 6% after the earnings announcement.

As the market is now close to saturation, Apple will no longer focus only on the high-end market. Its portfolio currently includes one flagship device (6s) and some older devices that are, from a technology and design perspective, almost 3-years-old (iPhone 5s). There are now rumors that Apple will launch a new smartphone in March that can outperform the iPhone 5c (introduced at the end of 2013 and targeted as the entry level for Apple). Warning: entry level for Apple doesn’t mean either poorly designed or filled with a low-cost chipset for a total sale price of $100! Right now and without contract, the last 6s costs $649 and the 5s $450. So, anything below $400 for this new “entry-level” iPhone, with no contract, would be a surprise.

iphone_historic_sales_year
Historical iPhone sales per year

That said, the device will only appear in April at best (which is Q3 for Apple), no matter what the price or the features it offers. Will this help the company to beat the 47.5 million iPhones it sold in Q3 2015? I doubt it, but the question is no longer relevant.

Even if smartphones are not going to disappear anytime soon, the fact that the market is getting saturated leaves everybody guessing what is the next “thing” will be. Will it be the Watch? Just for the records, the iPod accounted for almost 50% of Apple’s sales in 2008 and nobody worried when it took a dive in 2009 and iPhone sales went up instead. Will this story repeat itself with the Watch? Again, I don’t think so.

At the moment, it is only an extension of the iPhone, as you need an iPhone in order for it to work. So, even if something like 600 million iPhones are compatible with the Watch, most people already have the main, unavoidable device. Therefore, even if the preliminary numbers look good for Apple and the Watch, it is very unlikely that this device will compensate for a slowdown in iPhone sales.

Of course, both miniaturization and technology in general make for quick progress, but will the smartwatch totally replace the smartphone in 5 years, as Jean-Claude Biver, President of the LVMH Group’s Watches Division (Tag Heuer, Hublot, etc.), is predicting? I don’t believe so, as the smartwatch will always be a small form factor and therefore does not provide a nice user experience like reading an article or email, for example. Of course, technically it can do this, but will the user enjoy it as much as on a smartphone with a 4 or 5-inch screen?

When Apple introduced the Watch, many industry actors made fun of it. Does this attitude ring a bell? It is “déjà vu” and now some of them, like Jean-Claude Biver, are taking the challenge a bit more seriously and have already introduced some smartwatches. Even if the success is limited for now, with only around 80 thousand devices sold so far, it is still a step in the right direction for an industry that lacks innovation in the digital world.

No matter what the next big “thing” is, the smartwatch and smartphone will definitely play a role in our connected world. Is your company ready for this new era? Are your services and products already working on a smartwatch or smartphone?

Is James Bond retiring?

Even though James Bond’s latest saga, called Spectre, is set for release later this year, the world’s most well-known secret agent might have to retire soon. Secret services are rapidly changing and those agents who used to sabotage infrastructures, steal documents, seduce high-ranking officials or deploy secret microphones are no longer needed.

The written and broadcast media talk every day about armed conflicts around the globe, thanks to public announcements of some kind or other. This is how the public get to know about how what’s going on in the world, along with media’s reports that are based on information sent by insider sources, who are basically officials that strategically provide filtered and oriented information.

However, with the rise of electronic communications over the last 20 years or so, the classic spying techniques used by secret services are rapidly changing because states and private organisations have been investing heavily in something called cyber warfare, far away from the prying eyes of the media. This has led to a drastic rise in cyberattacks that rarely get noticed by the media, no matter how massive they are, except if some official calls them up to share some information.

the_hackerman
Hackerman, from the hilarious Kung Fury movie

There has been a massive and well-coordinated attack that recently took place in some unusual places… hotels. At this point, you might wonder if these hotels were located in some war area or conflict zone. Nope, the attacks took place in some very luxury hotels in Switzerland, as well as elsewhere. This staggering information came from a specialised company called Kaspersky, one of the world’s top security vendors, who identified a brand new malware that they identified within their systems (as they got infected too). They called the malware Duqu 2.0, as some of it looked like something they had discovered in 2011. It is composed of 19 modules and its intentions are mostly unknown.

No matter what these modules were supposed to do, the malware’s authors noticed that they had got caught and within hours started deleting everything, leaving Kaspersky sceptical about their chances of discovering what exactly Duqu 2.0 was capable of. Whatever it was able or supposed to do, the malware had multiple targets across the world, but almost all of them were related to Iran’s nuclear program. In particular, every hotel that hosted the negotiations got attacked up to 3 weeks before the meeting and was infected while the negotiations occurred.

Now, due to the attack’s sophistication and the amount of modules that were deployed, it is unlikely that the people behind this manoeuvre were just looking to snoop on or hijack communications. But this attack was no doubt launched by a state that wasn’t invited to the negotiations or, alternatively, one that was part of the meeting, but wanted to know what everyone was saying outside of the main negotiations table.

In the olden days, states would have sent their best agents, including James Bond, on site and around the area to spy with long-range microphones and copy sensitive documents, thanks to micro cameras, as well as sneak into rooms and compromise devices like computers and hijack the internal telephone system of the hotel, and listen to any conversations over the phone.


The Bonds from the official web site

But those were the olden days. Nowadays, all you need is a bunch of 10 to 20 highly qualified hackers sat thousands of miles was from the location but are able to get access to everything connected to a network. That means the attackers got to know everyone who was meeting there, as they probably hacked the hotel’s booking system, which meant they were able to see all of the devices, from computers to smartphones connected to the hotel’s networks. They then, most likely, infected the most interesting ones. Beside these “common” tasks, they might also have been able to hack the hotel’s phone system and not only hear what people might say over the phone… As those systems work over IP and are equipped with an operating system (no matter what vendor they use), they can be hacked too. This means that theoretically, nothing can stop it if you have the right guys on your team. Any phone or video conferencing system can be turned on silently, and the built-in microphone and camera will eventually transmit everything they catch without anyone in the room noticing it.

This is not science fiction as everything described was done on computers and the other strategic elements of a network. Cyber warfare is a reality and this example is probably only the tip of the iceberg as the malware only got discovered by chance. At the moment, as negotiations are ongoing with Iran, the people behind Duqu are probably left with no idea of what’s going on. However, that doesn’t mean it is time to send 007 and his fellow in again. It just means that cyber warriors are hard at work, trying to get a plan B or even a Duqu 3.0 in place.

And as for you, how is your sensitive electronic information protected? Do you have the right tools to ensure that you have a secure conversation with your employees or partners?

Apple Watch

The rumors started long ago, so when Tim Cook first presented the Apple Watch on September 9th 2014, the level of interest was huge. In fact, no fewer than 69 million entries for the product have been indexed in Google since then.

Exactly 6 months later, on March 9th 2015, Tim Cook presented additional details about the Watch, including its availability and pricing. The enormous anticipation this has generated means that millions of web pages will be talking about the product in the next couple of weeks and people will be able to test it for real.


Apple Watch

As the Watch only works with an iPhone, Genius App decided to take a closer look and now that I know a bit more about it, and the final development tools are available from Apple, here are my impressions. This is also my reply to all those people I have met over the last six months who have kept asking me the same questions like, “Will you buy one?”, “Do you think it is good?” or, the most annoying one, “Will it revolutionize the watch sector?”

First of all, Apple has become a monster – not because of the market cap, the size of its future campus, nor the amount of money it makes. I’m saying this because everything it creates must change the world and, if it doesn’t, then all of the haters and journalists will say that it is the beginning of the end for Apple. They will add that it is a fading company that used to be innovative but has got lost on the path to power, money and ego. They have no right to fail. Even some “specialists”, like Lionel Tardy, said that Apple was finally going to release a product one year after its competitors… as if Apple was somehow late on a market where no one had succeeded before.

Indeed, it is better to be late with the right product, than be first with the wrong one. I can’t say for certain this Watch will be another success for Apple, but what I can say is that they have been late on a lot of markets before. From computers to laptops, from MP3 readers to TV accessories, from smartphones to tablets, Apple was always late, but they succeeded by releasing a product that everybody wanted and competitors copied, just as if nothing had existed before.

We spend a lot of time on smartphones and, while some do it discretely, the latest statistics show that we spend an average of 2 hours and 48 minutes each day on mobile devices, which is putting our health at risk.

After Apple and the market in general expanded screen sizes from 3.5 inches to a gigantic 5.5 inches, it was time to have something more discreet to keep users connected to our digital world. Of course, the Watch doesn’t just help to keep up with the digital world, it also promises to deliver a brand new user experience for any person who needs a sports trainer, coach, or simply a “life assistant” attached to their wrist.

Thanks to the digital crown, one button and a touch screen of 312×390 pixels (272×340 pixels for the small model), users will be able to do plenty of things with just a few interactions. Of course, the system promises to be very customizable, enabling you to watch TV, read your emails and send messages. However, I’m not expecting a revolution here and if you are looking to replace your smartphone with this Watch, you don’t understand what this product is all about. Technologies, like Digital Touch, mean a new generation of apps are coming that – with the use of Siri or not – promise to bring you fast and reliable services with only a couple of soft touches.


Apple Watch, various screens

And what do watchmakers say about this? Well, at first they were critical and arrogant, saying things like: “This company doesn’t have a clue about this industry” or “They have no idea where they are going to”, just to quote a few of their derogatory comments. But even after criticizing Apple, some of the watchmakers learnt from the failure of Nokia and RIM, who had been at the top when Apple launched the iPhone in 2007, but are now either dead or bought out because of their slow reactions.

The lesson to the watchmakers was clear: “Do not underestimate Apple, react before you get eaten alive”. And the watchmakers are all reacting now: every one of them is introducing their own smartwatch or presenting it at the Baselworld, starting March 19th 2015. Festina, Swatch, Tag Heuer, etc, are all going to launch something that, more or less, can be called a smartwatch.

That said, these work on their own and so will only show a low level of integration with smartphones. Worse still, most of them are just basic bands that count your steps and do a few other metrics in order to track your daily physical activities; market is already full of devices like that. The Apple Watch will do a lot more and, most importantly, will rely on every iPhone that is running iOS 8.2, which should be about 500 million iPhones around the world – from the 4S (2012) to the latest 6 Plus. That’s a lot of users ready to make the jump.


Apple Watch with Milanese Loop

Rumors are that Apple actually started talks with watchmakers a few years ago, but none wanted to team up with them, as they didn’t come from the same world. Let’s see how this industry does in the coming years and whether they will live to regret this move or not.

Is your company ready to adopt a new device? Can a smartwatch add value for your services or products?

What’s behind the deal IBM – Apple?

After some classic, boring corporate announcements from IBM and Apple, it is time to have a look at the first results of their partnership.

This was announced last July, a mid-summer period when nothing normally happens in enterprises, and both of the press releases from IBM and Apple were perfect examples of how words can send you to sleep quicker than a drug containing benzodiazepines.

If this kind of message is very common from IBM, everyone – from journalists to Apple’s fans – were more surprised by Apple’s use of sentences, like “landmark partnership”, “new level of efficiency, effectiveness and customer satisfaction” and “radical step for enterprises”.

This is particularly true for Apple, as they have often been unsuccessful in addressing the enterprise market over the years. Initiatives like servers, such as Workgroup in 1993 and Xserve in 2004, and Xserve RAID failed miserably, to name but a few.

IBM has also had its failures while attempting to talk directly to end-users or consumer market. This probably started with OS/2, PCjr (you probably don’t remember that one!), the Simon smartphone (don’t laugh, that was in 1992) and ThinkPad, before finally ending with the sale of the PC division to Lenovo in 2004.

So, theoretically, these folks work in very different ways, but they are very complementary within their respective fields of expertise, and that is exactly what the deal intended to achieve: to bring the best from everyone in order to address industry specific requirements.

But everybody knows how hard it is to marry or have a partner with very different views on things. Imagine trying to mix the sex appeal of Marilyn Monroe with the thoughts of Stephen Hawking, or the soul of a Ferrari with the box style of a SsangYong. Those are hard to mix, but this is exactly what the partnership is all about, bringing the best out of the two organizations in order to – let me quote the PR – “transform the way people work, industries operate and companies perform”.

I was definitely skeptical at first and time passed. As promised in July, another IBM and Apple PR was issued in early December, announcing the 10 first apps related to this partnership, but went mostly unnoticed. Both companies set up webpages (IBM and Apple) that are different but look nice – flat design and clear messages were obviously the drivers here – but what about the apps?

The apps are related to six main industries: Banking and Financial Markets, Travel and Transportation, Retail, Insurance, Telco and Government. They look very much like any good app: intuitive, minimalist, with a clear interface. They are also, needless to say, very well designed.

Passenger+
Passenger+

At this stage, what impresses me most is the fact that the duo came out with an interface that was clearly inspired by Apple. They have always been known to make very simple software and hardware; they even got criticized for being too minimalistic, and I agree that in, some cases, this is true. On the other hand, IBM had just the opposite reputation of being too heavy, too much, too complicated and a classic example of featuritis!


Case Advice

The result, with the 10 first apps, is a perfect reflection of what has made apps so successful for the past 8 years (iPhone was introduced in January 2007). In other words, Apple clearly offers expertise with UI/UX and provides a strong and mature existing hardware platform (since 2007, Apple sold 800 million iOS worldwide). On the other hand, IBM is a major player on the enterprise market, with business services from hardware to software.


Sales Assist

That said, besides looking nice, every app has its own purpose: to boost sales, add value, develop customer retention, increase customer service, etc. From Passenger+ to Retention, all these apps have their own style and are adapted to enterprises’ requirements. It doesn’t end here. By the end of 2015, the duo has promised to deliver some 90 additional apps!


Retention

Now, you might not be an enterprise that relies on IBM infrastructures and services, but you enjoy your mobile devices. Isn’t it time to empower your employees or partners with additional functionalities or services in order to increase your sales, better inform customers, provide additional services, share strategic information and embrace the mobile era?

If the answer is yes, we are here to help you in your transition to this era.

It is all about colors and it is called myColor!

My company is proud to present a brand new social app that allow you to share your emotions thanks to colors and much more.


myColor icon

This is an old idea that grew slowly in the back of my head and last February, I decided to start this internal project with the Genius team.

Few months later, this idea crystallized thanks to a few thousands lines of code and, of course, an original and appealing interface.


myColor home screen

First available for iOS, what is this app for? Is it possible to introduce something new when the App Store is crowded with more than 1.3 million apps?

I believe there is still something original and different to do and offer as it is very hard to describe an emotion. Beside words, colors translate wonderfully emotions or feelings as they can be unique and say, in a fraction of a second, everything to your friends or relatives.


myColor contacts

Of course, not all colors mean the same to everybody and this is why we developed a palette of colors with professionals around on six main emotions: Happiness, Fear, Excitement, Anger, Love and Sadness. Commonly, this subject is called “color psychology” and we are happy to be the firsts to propose a comprehensive app to communicate around it.

Beside sharing your emotions with other people using the app, you can also access your color’s past, friend’s colors and see people that are using the app across the world thanks to the map and interact with them (if they are in your contact list).


myColor map

Finally, we did our best to keep battery usage as low as possible and services like localization will be activated only if you go into the map section.

Have a test, visit the web site and let me know what you think thanks to the Feeback buton in the Preferences.

Oh, and myColor is free! Enjoy!

Why did I say “no” to Microsoft’s CEO position?

I know what you are thinking: why was this guy contacted in the first place, and why did he refuse? This might sound either crazy or very stupid, as taking over the most successful software company in the world would be a dream come true for many people. But recent changes in this industry, as well as changes in Microsoft’s management strategies, made me wonder and turn down this proposal. Here is why.

Everybody knows Microsoft and, if you haven’t lived on a desert island for the last few decades, you’ve probably used its products more than once. Even if you did not want to use them, its 95% share of the computer market makes it very hard for anyone to try anything else.

Miscrosoft’s amazing, decades-long domination is unique and has built a monster that has generated almost USD 78 billions in revenue (FY 2013), with a net income of over USD 21 billions, thanks to its 99,000 employees. This is the result of a long and steady growth that started back in 1975, but for this article I’ll focus on the last decade:

msft_revenue_2003to2013_b
Microsoft revenues from 2003 to 2013 (FY)

Despite the global financial downturn of 2009, that is a period of continuous growth and within ten years revenue has almost tripled. So, looking at this graph, you may wonder why I didn’t happily jump on board this train and quietly take my seat on the company’s epic journey to new heights?

Well, as I said to John Thompson, who is in charge of recruitment and a member of Microsoft’s board, there are two major issues about the company that should concern any candidate.

Firstly, the core revenue of the company is mostly concentrated around PCs. As mentioned in a previous note, PC sales are slowing down. The latest figures have not only confirmed this, but they have shown an acceleration of this slowdown:

pc_ww_sales_2003to2013_b
Worldwide PC sales from 2003 to 2013

After a peak in 2011, when 365 million PCs were sold (that is 1 million per day!), 2012 saw that number decline to 352 million and, in 2013, PC makers lost more ground with only 316 millions machines sold (0.86 million per day). That is a 14% decrease over the last two years! The problem is: this trend is not related to an economic downturn like it has been in the past. Instead, this descent into hell for the PC makers is purely related to a shift in consumer spending. Not only are enterprises and individuals turning away from classical PCs, and embracing tablets instead, most people tend to have an impressive nano computer in their pocket, thanks to amazing chips and miniaturisation. To name just one, Apple’s latest A7 chip – which is shipping with the latest iPads and iPhone 5S – contains more than one billion transistors. This is the equivalent to an Intel Core i7 Sandy Bridge, which you’ll find in any powerful desktop computer.

For the board and the future CEO, that observation must lead to a rethink of what Microsoft’s core business is today, and what it will be tomorrow, as most PCs sold today have a Windows system and Office. As PC sales decrease and the tension on prices continues to drive the whole industry, Microsoft is going to come under increasing pressure and a quick look at the revenues of every division starts to show us why:

msft_revenue_divisions_2003to2013_b
Microsoft division revenues from 2003 to 2013 (FY)

Overall, all the company’s divisions look healthy and are enjoying a nice period of growth. However, if we look closer, the Windows division is clearly showing signs of slowdown, as less PCs are being sold which, in turn, means there are less Windows systems licenses. Also, the Surface RT tablet write-off for USD 900 millions hasn’t helped.

But this observation is only the tip of the iceberg. Let’s focus on the Fiscal Year 2013, which we can do thanks to this pie chart:

msft_revenue_2013_b
2013 revenue per division

As you can see, the divisions that provide most of Microsoft’s revenues are Windows (operating systems for PCs, Surface, etc.), Microsoft Business (mainly Office and Exchange) and Server & Tools (operating systems for servers and many other services and products for enterprises), as they account for 82% of total revenues.

Now, if we look at income, it tells another story:

msft_income_2013_b
2013 income per division

To cut a long story short, only three divisions make 97% of Microsoft’s income. They are helped by the 3% that the Entertainment division makes. All the other divisions lose money and by large amounts. But that is not all. The worse has yet to come, as Office products account for 29% of the revenue and Windows system for PCs an additional 22%. That’s a staggering 51% or over USD 40 billions! These cash cows are clearly dependent on PC sales and, as they are declining, it is very likely that this will have a strong impact on future results, which won’t be easy to compensate.

Of course, the new Surface tablet is supposed to bring in new revenues for them and, most importantly, a presence within the strategic tablet area. But the big question is, will it work, as their first attempt was a disaster? Plus, as European legal authorities allowed the acquisition of Nokia’s handset division by Microsoft, the company is going to add an extra 15 or 20 billions dollars to its revenue… but will this bring in more income? And ultimately, will this USD 7.2 billions investment be successful?

At this point, while at lunch with John, he goes: “But Tony, aren’t those challenges exciting?”

Sure, they are! But it is time to talk about the second and final aspect of why I politely declined this opportunity, and it comes down to people. When Bill Gates stepped down from his position as CEO and chose Steve Ballmer as his successor, he became Chairman of the board and created a new title for himself, in order to stay active within Microsoft as Chief Software Architect. Then, by June 2006, he had made the total transition from Microsoft to his foundation and dropped his position at the company he funded, keeping only one position: Chairman of the Board.

gates_web
Bill Gates

Meanwhile a review is mandatory and from 2000 until today, Microsoft has totally missed several major revolutions. To start with there was music. It was Apple that revolutionised the sector with its iPod and iTunes Store. Then, the smartphone was missed by Microsoft. To make matters worse, Steve Ballmer even laughed at Apple when they introduced the iPhone. Finally, the tablet is a new market where Microsoft is not only absent, but also cannot seem to find the right formula to get their share of the potential profits that are available.

ballmer_web
Steve Ballmer

To cut a long story short, Microsoft and its management has missed out on all of the major opportunities that have been created over the last 20 years or so.

Add to this, Steve Ballmer started the company’s first major reorganisation since it was created in 1975 last July before promising – one month later! – that he would stepdown from his position as CEO within the next 12 months.

But this is not the end, as Steve Ballmer is supposed to be staying on the Board of Directors, and there have been rumours that Bill Gates is showing an interest in once again making a more active contribution to the company that he created. How could this happen and, most importantly, what degree of involvement could a busy man like Bill Gates invest in Microsoft in order to renew the company? Is he tempted by the mythical Steve Jobs comeback at Apple? This might not be wise as, generally speaking, history rarely repeats itself and two different men have two different fates in life.

Now, how can a new CEO reasonably take responsibility for changing the company, get serious with smartphones, develop a new business with tablets, compensate for large income that is coming from two main cash cows, and also shake up the Research & Development department, which somehow spent more than USD 10 billions in 2013 (for what?) with the previous CEOs in the board of directors?

Or, to put it another way, how can he make sure that Microsoft gets ahead of the game by becoming a leader and not just a “wannabe” follower, when the only two CEOs that have driven the company for the last 39 years are on the Board of Directors?

As I explained to John Thompson on a final call, I would find it hard to face the challenges that I’ve listed above with this structure.

Of course, John said that I would be given a great deal of latitude and, as CEO, I’d be the one driving the company. However, as I would be a driver on very difficult roads, I’m afraid that I’d have to share the car with people who had only one idea in mind: to get behind the wheel and drive the car themselves.

With that in mind, how can you plan for your succession? And, just as importantly, how can you be sure that you and your management team are the right people to face the new challenges ahead?

PS: today’s note is fictional but the challenges and governance issues are not…

In a digital era, success is never too far from extinction…

From time to time, a technological revolution changes everything. As the world gets more global and our communications travel at – virtually – the speed of light, one idea or pioneering piece of technology can be adopted faster than ever and become the must have gadget for an important part of the population. This is great news for fast-paced innovators but can sound the death knell for any companies that are slow to adapt, even if they have spent the last few decades as a successful market leader.

No example illustrates this better than the US company, Eastman Kodak. In the 80s, it was a huge success with more than 128,000 employees, $9 billion in revenue and profits that exceeded over $1 billion.

kodak_stock_bKodak’s stock from the 90s to now

However, digital photography’s rapid rise in the late 90s and the groundbreaking introduction of smartphones, particularly the all conquering iPhone in mid 2007, managed to kill a company that never succeeded in renewing itself. Of course, Kodak tried to adapt to the digital world, releasing a number of interesting products, including digital cameras and services, but it was a case of too little, too late. The company’s progress was far too slow and it failed to achieve any significant success. By January 2011, they filed for bankruptcy and even though a judge approved the company’s reorganization last August, and it eventually got out of Chapter 11, the future is more uncertain than ever for the few thousands employees still onboard.

To understand better what happened, it is important to take an analytical overview of the progress that has been made by the top players in the digital photography sector in the last few decades. With the following graph, I point out the most obvious changes and it is all about sensors, the heart of digital cameras that capture the images. With time, sensors have got smaller, smarter and cheaper, as have the rest of the camera’s components, and they also record more data. In other words, their quality and ease of use mean they totally outperform the classical, film-based cameras of the past:

mpx_dslr_b

Of course, the sensor’s size or capacity wasn’t the only progress that manufacturers made. From a technical point of view, engineers developed much greater sensitivity, extended the dynamism range, created more frames per second and even managed to enhance the cameras’ video capabilities. As if that wasn’t enough, miniaturization and bits of hi-tech software, new features like face recognition, pioneering geo localization, social sharing and unlimited wireless Internet access, have greatly improved the cameras we can use in our smartphones. So, in this area, the evolution of photographic performance has been even faster:

mpx_smartphone_b

Digital photography manufacturers needed 14 years to go from a 2 Megapixels sensor to 36 Megapixels. Smartphones were almost twice as quick – needing just 8 years to achieve the same progress. Of course, if you compare a 38.2 Megapixels picture taken by a smartphone Lumia 1020 and a 36.3 Megapixels pictures from the Nikon D800, there is still a big difference in quality. On the other hand, the D800 costs around USD 3,300 and takes only pictures, while you can pocket the 1020 for just USD 600, or USD 130 with a subsidiary contract, and there are over a thousand things you can do with it.

Ironically, this fast-paced evolution is now threatening the digital camera industry that killed Kodak. As the technology and performance of image acquisition on smartphones are making giant steps forward every 6 to 12 months, classic digital camera makers, from compact to expensive DSLR systems, are starting to face stiff competition. In 2012 alone, the mobile industry sold 1.75 billion devices, of which 712 millions were smartphones. Analysts predict roughly the same amount of mobile phones will be sold wordwide this year, but smartphone sales are rocketing and should represent around 837 millions units, a 17% increase from 2012:

mobile_phone_sales_b

At this point, it is worth noting that in some countries, smartphone sales represent more than 55% of total mobile sales. At the same time, digital camera makers suffered a 30% sales decrease from 2007 to 2012. This is not down to an economic downturn, but a shift in consumer spending that, with time, will get only worse as smartphone cameras get better.

And what about you? Is your company ready to go fully digital, rely on the Internet and move over to mobile phone? And what about your competitors, are they moving in the same technological direction?

At last, our first App is out and it’s called on.plans!

I graduated in architecture a long time ago and, despite changing course in my career, I’ve always wanted to provide a valuable service for architects. Today, I’m proud to release an App that will do just that by helping architects and, more generally, construction managers to follow their projects from the drawing board to completion. 

For those that don’t know, there are three main phases of an architectural project:

  • The Schematic Design or honeymoon period between the client and architect, when you sketch your dreams and ideas, using a lot of existing tools.
  • Getting the Construction Documents ready, including the final plans and all your admin paperwork, to get permits and a clear idea of your project’s costs. There are a lot of tools that can help you with this, including AutoCAD and ArchiCAD, to name but a few.
  • The Construction phase, when your architect must coordinate dozens of contractors in a timely manner in order to get your project ready on time and within the agreed budget. This is a tricky phase when your project transforms from something virtual on a computer to a completed house, and a lot can happen during this vital period. This phase alone represents almost 30% of the time that the architect will spend on your project.

There is a lot of CAD software that can handle phases one and two, but phase three is more difficult from a software point of view. As a result, most architects just use a block of paper and perhaps their mobile phone to take some pictures. At Genius App, we thought deeply about this and, with the help of JDV – a small company specializing in design and graphics which brought the idea  – created on.plans, the simplest way to follow your construction plans every step of the way.

We started the project a few months ago and, after a great deal of research and testing, are now ready to go public. Anyone can download on.plans from the App Store (Switzerland) and give it a free trial by installing the App on their iPad. So sign up now and test on.plans straight away, the setup takes less than a minute.

onplans-icone

Thanks to its easy-to-use interface, on.plans allows you to import your projects, contacts and plans (PDF) to your iPad. It will not only improve the way you manage the construction of your projects by saving you valuable time, but also make it much easier for you to monitor your construction projects. You can place demands, take pictures, draw sketches and assign tasks to contractors, as well as set the deadlines when the work must be completed.

schema-simple

Basically, on.plans offers a comprehensive, step-by-step and easy way to manage a construction project. It is guaranteed to keep track of all the details, so that you will never forget anything.

The App, which is available in English, French, German and Italian, can only be downloaded from the Swiss App Store at the moment, but will soon be available worldwide. We have plenty of ideas in the pipeline, and some are already in development, so expect some exciting updates in the near future.

Don’t hesitate to email us or visit our website to get more information and post a comment.